Key highlights

• $234 million for enrolment increases in 2026 and 2027, with $10.5 million in Equity funding over the next four years
• Final-year Fees Free will end on 31 December 2026, with learners able to apply for their entitlement until 31 December 2027
• $86.9 million redirected from final-year Fees Free to fund an additional 1,000 Youth Guarantee places from 1 July 2026, and $69.1 million to double the number of places for senior secondary students in Trades Academies by 2030
• 2% tuition subsidy increase for foundation education provision from 1 January 2027
• Funding for the Student Loan Scheme to enable providers to increase fees by up to 6% in 2027
• Time-limited funding to support Industry Skills Boards’ (ISBs) Strategic Workforce Analysis and Planning function during their initial establishment
• Funding for international PhD students at universities will be capped in 2027 to allow the Government to consider a new funding model for international PhD students. 

Summary of announcements for tertiary education

Budget 2026 provides $234 million in additional funding over the next two years to support growing the domestic pipeline of students. This funding will enable the Tertiary Education Commission (TEC) to fund 99% of forecast tertiary education and training enrolments in 2026 and 2027. It also provides $10.5 million in Equity funding over the next four years to meet increased demand.

The Government has confirmed that final-year Fees Free will finish on 31 December 2026. Learners who complete an eligible provider-based qualification or work-based programme in 2026 will be able to apply for their final-year Fees Free entitlement within 12 months of completion, up to 31 December 2027. Learners who complete an eligible provider-based qualification or work-based programme after 2026 will not be eligible for final-year Fees Free.

Funding for final-year Fees Free will be reprioritised towards:

• doubling the number of places for senior secondary students to engage in high quality trades and technology programmes through Trades Academies (from around 10,000 to around 20,000 by 2030) and
• increasing the number of Youth Guarantee places by 1,000 from 2026 (from 4,500 to 5,500). 

$24.5 million will be provided over the next four years to increase tuition and training subsidies by 2% for foundation education from 1 January 2027. This includes all foundation education funds. The specific areas under the ‘foundation education’ umbrella term are outlined below:

• Adult and Community Education Fund
• Delivery at Levels 1-2 on the New Zealand Qualifications and Credentials Framework
• Intensive Literacy and Numeracy Fund
• Workplace Literacy and Numeracy Fund
• English Language Teaching – Intensive Literacy and Numeracy Fund
• Refugee English Fund
• Gateway
• Youth Guarantee.

A further initiative funds forecast costs to the Student Loan Scheme from increasing fees by up to 6% in 2027. In June this year, the Minister for Tertiary Education will consult on the proposed Annual Maximum Fee Movement (AMFM) rate of 6% in 2027 through a public consultation notice published in the New Zealand Gazette.

To support Industry Skills Boards’ (ISBs’) Strategic Workforce Analysis and Planning function during their initial establishment, Budget 2026 provides $3 million of time-limited and targeted funding in 2026 and 2027. This funding will be administered by the TEC, with priority activities for this funding being:

• exploring industry expectations of secondary school leavers wanting to enter their sectors (school transitions)
• research into ways to improve apprenticeship uptake and completions (apprenticeship barriers), and
• supporting relevant workforce data infrastructure. 

Details for this funding are being worked through. TEC will be engaging with ISBs shortly to provide further information.

Funding for international PhD students at universities will be capped in 2027 to allow the Government to review international PhD funding settings. The funding cap will limit the amount of funding universities receive for these learners, which may cause universities to limit the number of new PhD enrolments.

In line with the Government’s priority to deliver effective and fiscally sustainable public services and the need to focus on core activities in the current constrained fiscal environment, some funding has been reprioritised towards other areas of tertiary education.

Further information

For Budget announcements, see Latest from the Beehive – Beehive.govt.nz.

For information on 2027 funding rates, see Funding rates by year.